Q&A: Former Commerce chief returns to a familiar role (MN)

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Brian Johnson
April 19, 2019 at 1:17 PM

After a couple of high-profile jobs in state government, Jessica Looman has returned to her roots in the construction trades.

Looman recently spoke with Finance & Commerce about issues such as the construction labor shortage, efforts to bring more young people into the construction industry, and wage theft. …

You previously served as general counsel for the laborers’ union. Did it feel like a homecoming when you took over as executive director of the Minnesota Building and Construction Trades Council?

Yeah, a lot of people have been welcoming me back, which has been really fun. I started my professional career in the labor movement – first in Washington, D.C., and then here in Minnesota. And then I went to law school and when I got out of law school, I became the general counsel for the Laborers District Council of Minnesota and North Dakota, which is the construction craft laborers union. That was a wonderful experience.

I think the combination of my work as general counsel for one of the larger building trades unions, and then particularly the great experience I got as a public servant in Minnesota, really brought me to where I am today.

What are some of your priorities as executive director?

We want to continue to develop public and private investment in infrastructure and construction. We see that we have a role in economic development of Minnesota, our communities and our economy. That includes growing our construction services sector.

The second goal is, how do we make sure we are bringing new people into the construction industry and the construction trades? And how do we make sure we are increasing our diversity, increasing our inclusion?

We currently have about 10,000 registered apprentices that are participating in building trades apprenticeship programs. About 20 percent of those are people of color. That is something we have been focusing on and trying to increase. And we continue to work in the space around workforce development. That includes increasing the number of women in the construction trades.

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(Op-ED) Keith Ellison: Time to Address Wage Theft is Now (MN)

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By Keith Ellison, Union Advocate
April 29, 2019

Frankly, I was shocked.

Here I was, listening to a man through an interpreter describe how the paycheck that he worked so hard for at fairly low wages was delivered to him in a debit card. He didn’t get a regular paycheck or a check stub of any kind: he was told that this debit card represented his pay and that the pay had been deposited for him.

It was hard for him to figure out how much he had actually gotten paid. When he did, he found that he had lost as many as three days’ wages even though he had worked hard every single day.

…

These folks are all victims of wage theft. Wage theft takes many forms: having hours shaved off your paycheck; being forced to work off the clock; not getting paid for overtime; being paid at a lower rate than promised, sometimes below minimum wage; being paid in cash or other forms, with no Social Security, unemployment, or worker’s comp withheld; being misclassified as an independent contractor; and more.

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I was also shocked at the frequency with which wage theft happens. Reputable studies from several years ago estimate that two-thirds of all low-wage workers in the country have experienced at least one form of wage theft. The amount of wages stolen each year in Minnesota may be in the hundreds of millions of dollars: nationally, the Economic Policy Institute has estimated that $50 billion a year is stolen in wage theft. That’s more than three times the value of all the goods stolen through robbery, burglary, larceny and auto theft combined.

Those estimates are 5-10 years old now. In an economy that’s gotten more and more predatory, it’s surely only gotten worse.

One reason people don’t know wage theft happens is because employers often retaliate or threaten to retaliate against people who report it. Another reason is that wage theft commonly happens in the shadows, to the most vulnerable among us, especially immigrants, people of color, and young people. African American workers are three times more likely to have had their wages stolen than white workers, and Latina/o workers are four times more likely. The predators who steal from these folks do so because they figure they’re the least likely to report it.

Too often, wage theft is connected to criminal abuse. According to human-rights advocates, every case of human trafficking also involves wage theft. If you find people being trafficked, you’ll find people whose wages are being stolen. That’s happening right here: in Hennepin County, a contractor has been charged with human trafficking, insurance fraud, and undocumented wage theft. The charges claim that “he knew the men that he had employed were undocumented workers and used that knowledge as leverage to force them to work long hours for less than market pay and without adequate safety protection,” and that “when workers were injured, he told his employees that they would lose their jobs and be deported if they sought medical attention.”

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– Keith Ellison has been serving as Minnesota’s Attorney General since January 7, 2019. As the People’s Lawyer, his job is to help Minnesotans afford their lives and live with dignity and respect. Before becoming Attorney General, he represented Minnesota’s 5th Congressional District in the U.S. House of Representatives for 12 years.

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Labor Union Says Workplace Violations Widespread in N.H. (NH)

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By SARAH GIBSON * APR 16, 2019

A local labor union is urging lawmakers to support legislation to combat what it says is a growing problem with workers compensation and wage theft in New Hampshire.

Members of the New England Regional Council of Carpenters say companies are using a loophole to underpay workers and underreport employees, by misclassifying these employees as independent contractors.

At an event organized by the union Monday, Rudolph Ogden, a deputy commissioner at the N.H. Department of Labor, told NHPR it’s not just carpenters who are getting shortchanged.

“For 20 years people have talked about misclassification and they said it’s all in construction and many said it’s all drywallers,” he said. “Now we’re seeing that it’s not just in construction; it’s in a variety of industries.”

When a company pretends its employees are independent contractors, it doesn’t have to provide workers comp if they’re injured, and it doesn’t pay as much in business taxes.

“We can’t compete with a company that doesn’t pay its workers and that doesn’t pay workers’ compensation,” said Richard Pelletier, of Auburn, N.H. His company, Universal Drywall, was fined for misclassification for projects in Massachusetts, but he says he’s since become a union contractor.

Pelletier and other representatives from union contractors said they do most of their business in Massachusetts because they’re so often undercut by companies in New Hampshire that reduce overhead costs by misclassifying workers and paying many under the table in cash.

The union is backing Senate Bill 151, a Democrat-sponsored bill that would make it easier for the DOL to issue stop work orders, but some in the industry fear it would slow down building projects.

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NJ Labor Department Bars Two South Jersey Contractors from Engaging in Public Work (NJ)

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April 11, 2019, 3:40 pm

TRENTON – The New Jersey Department of Labor and Workforce Development’s Wage and Hour Compliance Division has barred two public works contractors from doing business in the state for violations outside the state’s prevailing wage law, heralding a tough and progressive new enforcement approach against dishonest contractors.

…

“As I have often said, working on public projects is a privilege, not a right,” said Labor Commissioner Robert Asaro-Angelo. “These cases signal a new and bold effort to ensure that privilege is extended only to contractors who follow our laws, and pertinent laws in other jurisdictions.”

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New Jersey already has one of the strongest prevailing wage laws in the country. The Public Works Contractor Registration Act requires all contractors, including named subcontractors, to register with the Labor Department before submitting price proposals or engaging in public works contracts exceeding the prevailing wage threshold of $15,444 for municipalities and $2,000 for non-municipal work.

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PRIME CONTRACTOR ON NEW YORK FEDERAL RESERVE BANK PROJECT PAYS $420,335 IN BACK WAGES AFTER U.S. DEPARTMENT OF LABOR INVESTIGATION (NY)

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Agency: Wage and Hour Division
Date: March 29, 2019
Release Number: 19-0440-NEW

NEW YORK, NY – Tishman Interiors Corp. – the prime contractor for a renovation project at the Federal Reserve Bank of New York – has paid $420,335 in back wages to resolve violations of federal wage laws following a U.S. Department of Labor Wage and Hour Division (WHD) investigation.

WHD found Tishman, which served as the bank’s construction manager on the federally funded project, violated the Davis-Bacon and Related Acts (DBRA), the Contract Work Hours and Safety Standards Act (CWHSSA), and the Copeland Act. The company subcontracted electrical and cable installation work to subcontractors Alan Joel Communications, Crewforce, and Teksystems Management.

Investigators found the bank failed to include DBRA provisions and required wage rates in its contract with Tishman. This omission led to Tishman and the three subcontractors paying their employees at hourly rates lower than the prevailing wages for the work they performed, a DBRA violation. WHD also found all four employers violated the CHWSSA when they failed to pay required prevailing wages for overtime when employees worked more than 40 hours in a workweek. Their failure to prepare and maintain certified payroll records and to sign compliance statements in the payrolls resulted in Copeland Act violations.

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Connections: Discussing the debate over the “prevailing wage” (NY)

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By EVAN DAWSON & MEGAN MACK * APR 1, 2019

Are construction workers paid fairly in New York State? The legislature has been debating the so-called “prevailing wage.” Non-union workers and business leaders have warned that expanding the prevailing wage will cripple businesses that want to expand, while stalling the clean energy industry. Union leaders have joined many Democrats in calling for more wage protections, arguing that the business community always claims the sky is falling when they have to pay people a little bit more.

Our guests debate it:

(Listen to Discussion)

Laborers Graduate Apprentices, Urge Union-Built Affordable Housing (NY)

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April 20, 2019
By Steve Wishnia

NEW YORK, N.Y.-The about 60 Laborers International Union apprentices lined up in a side room at St. Vartan Armenian Cathedral in Manhattan Apr. 17, clad in brilliant saffron-orange caps and gowns.

“When you graduate, you’re part of this forever,” Local 79 apprentice coordinator Timmy Valentine told them.

…

Introducing the commencement speaker, Public Advocate Jumaane Williams, Prohaska praised him for his work last year getting the City Council to pass the Construction Safety Training Act, a bill to expand the amount of safety training required for workers on construction projects in the city.

“Just because we build this city doesn’t mean people have to die,” Williams said. He noted that the 111 new journeymen had completed 400 hours of classes and almost 4,000 hours on the job over three years or more. “In particular, I’m thankful to see so many women graduating,” he added.

“We all know how important it is to have union jobs on construction sites,” he continued. “A union is not just a job, it’s a career.”

One thing the city can do, he said, is to make sure that the affordable housing it builds is affordable to the people who build it. He got a standing ovation when he said that if the city is giving subsidies or tax breaks to developers, “we deserve union jobs.”

Prohaska made the same point in an op-ed article published in City Limits earlier in the day. “My vision is one where developers put Bronx residents to work-and help them pursue careers-building new housing they can afford to live in,” he wrote. “Here’s how to get it done: as developers seek city and state subsidies for new construction projects in the Bronx, they should be required to hire local residents and create union career-path jobs in construction.”

Without expanding union construction careers, he said, residents, especially immigrants and people of color, will be “vulnerable to poverty wages, economic stagnation, and exploitation whenever they work on unregulated construction sites.”

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Multnomah County takes on wage theft (OR)

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Apr 16, 2019 | Workers Rights
By Don McIntosh

A proposed pilot program could make Multnomah County a trailblazer in fighting wage theft in construction. To make the case for it, a panel of union members and advocates addressed the County Commission April 9 about the many ways unscrupulous contractors cheat workers out of wages – and why the complaint-driven process at Oregon’s understaffed Bureau of Labor and Industries isn’t enough to stop it. [Watch their presentation here.]

Wage theft is the underpayment or nonpayment of wages or benefits that workers are legally entitled to receive. It’s not uncommon in construction – even on taxpayer-funded public construction projects that employ compliance staff to guard against it. Those staff need help, several union representatives told commissioners.

And they’d get that help under the proposal put forward by Multnomah County Chair Deborah Kafoury’s office. As detailed in a budget memo, the proposed Labor Compliance Pilot Program would allow knowledgeable members of the public, such as union representatives, to volunteer to help enforce prevailing wage and wage and hour laws on County construction projects. The volunteers would have access to the certified payroll records that contractors submit to the County – and be allowed to visit worksites to interview workers.

Modeled on a program at Los Angeles Unified School District, the pilot project would assign a half-time-equivalent staff person to train and support 10 volunteers who would visit the County’s construction projects.

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Thirteen ways to cheat your employees out of wages

Wage theft is far too common in construction. Here are some ways crooked contractors do it.

  • Don’t pay them. Hire a day laborer for a day’s work, then stiff them when the work is done.
  • Don’t pay for breaks. Tell them the company’s in too big a hurry for them to take meal and rest breaks.
  • Don’t pay them overtime. You can’t afford time-and-a-half.
  • Tell them they’re independent contractors. That gets you out of paying employer Social Security tax, unemployment insurance, workers’ comp, and maybe even minimum wage.
  • Don’t pay them for time in transit. Tell them to pick up the company truck and equipment and drive 50 miles to the work site, but pay them only for the hours they work on site.
  • Call them apprentices. Pay your journeymen the apprentice wage.
  • Work them off-the-clock. Ask them to do a little prep work before they clock in, or a little cleanup after they clock out.
  • Ask for kickbacks. You gave them the prevailing wage job, didn’t you? Have them pay some of those higher wages back to you, or to the foreman, or labor broker.
  • Pay piece rate. So what if it ends up less than minimum wage?
  • Deduct things from their wages. Why should you pay for the tools or supplies they need to do the job?
  • Misclassify them. On a prevailing wage job, pay them at the laborer rate while they do carpenter or painter work.
  • Leave off benefits. Prevailing wage includes money for benefits, but who can afford to offer them?
  • Lie about the number of hours they work. Pay the prevailing wage. Just tell the project superintendent that your employees worked half as many hours as they really did.

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Union: Construction tax fraud costs governments $450B annually (PA)

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Bob Bauder
Monday, April 15, 2019 3:37 p.m.

Several hundred carpenters’ union members and public officials rallied Monday in Downtown Pittsburgh to call for an end to construction industry fraud.

Union officials said unscrupulous contractors and labor brokers rob the public of federal and local tax revenue by paying workers cash “under the table,” misclassifying them as independent contractors and failing to pay such benefits as workman’s compensation and unemployment.

The fraud costs local governments across the United States an estimated $450 billion annually in lost tax revenue, officials said.

“When you talk about tax fraud, it’s about people that are cheating,” said Bill Waterkotte, eastern district vice president of the Keystone Mountain Lakes Regional Council of Carpenters. “They’re not paying taxes. They’re paying cash. Four hundred and fifty billion (dollars), in evading taxes. That could go to building our roads and bridges, our schools, our veterans, helping the people who need help, and they’re stealing it.”

The union estimates fraud costs Pennsylvania governments about $200 million each year, but offered no specifics for the Pittsburgh region.

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Pittsburgh City Council late last year approved a resolution proposed by Councilman Corey O’Connor that created a task force to investigate the issue. O’Connor said the members plan to offer future legislative remedies to council and the mayor.

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“We are going to go after those bad workers, those people that take our tax money, that take your jobs because subcontractors and contractors are undercutting city bids. We have to stop that,” O’Connor said.

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Milwaukee Building and Construction Trades Council Statement on Gov. Evers’ signing Executive Order to Protect Wisconsin Workers (WI)

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“Standing with working families, Governor Tony Evers’ took a huge step to protect Wisconsin from corrupt employers who cut costs by scamming workers and the state of Wisconsin.”

By Milwaukee Building and Construction Trades Council
Apr 15th, 2019 02:39 pm

MILWAUKEE – Milwaukee Building and Construction Trades Council Statement President Dan Bukiewicz released the following statement in response to Gov. Evers’ signing Executive Order #20 to Protect Wisconsin Workers:

“Standing with working families, Governor Tony Evers’ took a huge step to protect Wisconsin from corrupt employers who cut costs by scamming workers and the state of Wisconsin. It’s refreshing to have a governor not only focused on what is best for workers and Wisconsin’s future. I applaud Governor Evers for taking immediate action to protect the middle class,” said Milwaukee Building and Construction Trades Council Statement President Dan Bukiewicz.

“Contracted work is an often-overlooked driver of eroding labor standards, rising income and wealth inequality, persistent structural racism and occupational segregation, and the shifting of power away from workers and toward corporations.

Many industries in which people of color are over represented are characterized by the widespread use of independent contractors. These contracted jobs offer no unemployment insurance protections or even a minimum wage,”added Bukiewicz.

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(See PDF Copy of Executive Order)